Dollar General anticipates $100M loss from theft.
Retailer Dollar General Expects Major Financial Losses Due to Retail Theft
Retailer Dollar General is anticipating significant financial losses in its most recent quarter, which it attributes to retail theft. The company’s gross profit has fallen 126 basis points compared to last year, primarily due to lower inventory markups and increased shrink. Shrink refers to the loss of inventory through various means, such as theft, and markdowns and inventory damages have also contributed to the retailer’s losses.
Continued Worsening of the Shrink Environment
“The shrink environment has continued to worsen,” stated Dilts during the company’s second-quarter earnings call. The retailer now expects approximately $100 million of additional shrink headwind since the last quarter’s call. The most recent quarter lasted for three months and ended on Aug. 4.
Dilts has warned that the pressure from retail theft will persist, and inventory shrink will increase in the second half of 2023. However, the company plans to take precautions to combat this problem, including reducing their inventory position and improving execution in their stores.
Retail Theft: A Growing Problem
Retail theft has become a growing issue within the United States. Retail giant Dick’s Sporting Goods experienced a 23% plummet in profits, resulting in a 24% decrease in their shares.
Los Angeles has recently launched a task force to combat the unprecedented rise of organized retail crime thefts across the region. The force includes law enforcement agencies from multiple Southern California areas, such as the Los Angeles Police Department, Los Angeles Sheriff’s Department, agents from the U.S. Marshals Apprehension Task Force, and the FBI Apprehension Task Force. Mayor Kim Bass announced the formation of this task force after 30 masked robbers dressed in black and gray stormed a Nordstrom department store, stealing designer purses, clothing racks, and jewels. The thieves caused extensive damage by dragging display cabinets, shattering glass cases, and dismantling shelving.
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